The dynamics and dimensions of industrial relations
change: a comparative analysis.

Abstract:

This paper summarises the conclusion of an OECD-based study on the
nature and dynamics of change in industrial relations. A number of
industrialised market countries are examined, six of which-Australia,
Japan, Britain, the United States of America, West Germany and Sweden -
are the focus of a detailed study. Successive parts of the paper examine
the experience of change, the agents of change, factors facilitating
change,and barriers to change. The paper concludes with several
generalised propositions about the macro change process drawn from the
experience of the countries reviewed, and a review of policy options.

For many countries the 1980s are seen as a decade of change in
social policy and practice. To seek change implies the quest for a
better order. What, then, are the elements of "good industrial
relations" which a reform process might seek to capture? Four
particular features come to mind. First, the system must satisfy the
employers and trade unions, managers and workers who are principal
actors in it Second, it should operate without undue industrial conflict
Third, it must determine wages, working conditions and working practices
that are consistent with national economic and social needs. And fourth,
closely linked with the third, it should facilitate the organisational
and technological change that is essential to a successful economy,
while at the same time ensuring that the costs of adjustment are
equitably shared.

2. The Experience of Change

Poking back over, say, 60 years, some decades have witnessed
appreciably more change than others, although on the whole it is
surprising how few radical changes there have been

Apart from the effects on labor relations of Nazi and fascist
systems in the early 1930s, that decade also saw notable change in three
or four other countries. In the United States the spur of the Depression
prompted a New Deal in which the strengthening of trade unions (with
which the rapid growth of industrial unions was associated) and the
establishment of a system of collective bargaining played a major part
In Sweden, long years of industrial strife preceded the accession of a
social democratic government, fear of government intervention, a change
in leadership for both the employers and the unions, and a deep
dissatisfaction with the existing situation among employers and workers,
which set off the talks culminating in the Saltsjobaden Agreement of
1938, thus laying the basis of the much praised 'Swedish
Model'. In Switzerland, too, fear of government intervention and
distaste for prevalent conflict led to the first industrial peace
agreement of 1937. A fourth change, part of the 'experience
Blum' in France in 1936, proved to be mainly transient. Having
foundered on economic crisis, the opposition of employers, and political
dissension among the trade unions, it left behind it little more than
the establishment of paid holidays and a notional 40-hour week,

The 1940s showed another, if expensive, way of changing an
industrial relations system-war. The war-damaged countries of
continental Europe, together with Japan, reconstructed their industrial
relations systems. In the liberated countries there was usually some
infrastructure which had not entirely disappeared under occupation and
could be revived, but the new systems differed significantly from the
old. In Germany, Austria and Japan completely new systems had to be
devised, while in the case of Japan key new elements were introduced by
the occupying powers (Gould, 1984).

From 1950 on, however, radical systemic changes have been few, the
most substantial being those wrought as a result of political change in
Spain, Portugal, Greece and Turkey. Elsewhere institutional changes
contributed to a greater industrial democracy. Changes warranting
consideration, are those that have taken place in France, Britain,
Sweden and Australia (in contrast to the United States and Japan where
change has been minimal).

The Socialist government that came to power in France in 1981,
after decades of government by right of centre parties, sought to curb
unstable employment, to encourage employment by reductions in working
hours and to promote industrial relations in the enterprise. But the
four substantial laws passed in 1982, the' Auroux' Laws which
the centre-right government of 1986-88 did not seek to change, seem to
have made remarkably little difference to French industrial relations
(Moss, 1988). And, considering that the rate of unionisation in France
is now probably no more than between 15 and 20 per cent, a great many
formal aspects of industrial relations are not applied in practice.

In the aftermath of the war, British industrial relations were
considered to be among the best in the world. The British saw
voluntarism to be a key element of the system. As Kahn-Freund described
it:

"there is, perhaps, no major country in the world in which the
law has played a less significant role in the shaping of
(labourmanagement) relations than in Great Britain, and in which today
the legal profession have less to do with labour relations."
(Kahn-Freund, 1954:44)

Voluntarism was upheld by the Donovan Commission on Trade unions
and Employers' Associations, reporting in 1968, but already in 1969
the Labour government, while accepting much of Donovan's analysis,
were moved by the nature and amount of industrial conflict at the time
to propose greater intervention by the law in strikes. Then in 1971 the
succeeding Conservative Government passed an Industrial Relations Act
which considerably augmented the extent of legal involvement in
industrial relations. The Act was an embarrassing failure but any
possible further change was cut short when the government left office in
1974, effectively as a result of a major coal strike. The subsequent
Labour government (1974-79) put an end to almost all of the 1971 Act and
substitutedits own framework, which more or less restored the legal
position to what it had been before 1971 and, indeed, strengthened the
position of both workers and unions. This legislation in turn had to
give way to the series of very different Acts introduced by the
Conservatives between 1980 and 1990. There is no doubt that if, or when
Labour again accedes to office there will be a further reconstruction of
labour law.

Apart from the general legal framework, the British Government
forced a substantial shift in public sector industrial relation, as
evidenced in its tough stance in imposing cash limits to contain labour
costs in the public service in the early 1980s; its refusal to subsidise
large wage increases in nationalised industries; its terrnination of the
Civil Service Pay Research Unit; and its replacement of the traditional
negotiating arrangements for school teachers.

In effect, what had been a consensus in Britain concerning
industrial relations has increasingly, since the 1960s, become a
political football and there seems little prospect of the major
political parties, whose beliefs concerning industrial relations mirror
their strong disagreement over a wide range of policy issues, agreeing
on what constitutes a good industrial relations system. The most that
one can say is that a return to a system as free of legalism as British
industrial relations were up to the 1960s is extremely unlikely. The
present choice appears to be between a further weakening of the trade
unions and a new legal framework that strengthens them. British
industrial relations have not yet reached a new plateau of stability.

A formidable body or legislation concerning trade unions and
industrial relations has, then, been placed on the statute book-five
major Acts in nine years. But what has been the effect on the actual
conduct of industrial relations in Britain? It has had little impact on
the shape of trade unions and employers' associations. It has not
changed the levels at which collective bargaining is conducted, nor the
nature of the formal bargaining machinery. It hasleft untouched public
assistance rendered by the Advisory Conciliation and Arbitration
Service, (ACAS). Though it has, together with the changed economic
environment, weakened the bargaining power of the trade unions, wage
increases for workers generally have consistently been running at levels
appreciably above what can be afforded without adding to inflation.
British labour productivity is still considerably lower than
productivity in comparable countries. It would be wrong, however, to
assume that the new laws have had no effect. They have inhibited
indiscriminate use of the strike weapon; they have reduced the extent of
the closed shop; and they have made union leadership more accountable to
the members. But if they have persuaded militants to be circumspect and
encouraged management to be more assertive they have done little to
change the attitudes that underlie British industrial relations.

The Swedish industrial relations system has for long been
considered a shining example to other countries. But the 'Swedish
model', though still among the most effective, is hardly what it
was. (Ahlen, 1988; Lash, 1985; Lundberg, 1985; and Myrdal, 1980).
Briefly, at the end of the 1960s the unions were concerned with the
increasing concentration of Swedish industry and anxious to achieve
gains for their members beyond simple wage increases. Though one of the
bases of the.Swedish model was that unions and employers should resolve
their differences between them, and keep the government out, the unions
now turned to government (on the grounds that the employers were
unwilling to satisfy their demands and that some of those demands could
only be fulfilled by legislation). The result was quite a series of
Acts, notably the Board Representation Act, 1972, strengthened in 1976
and 1987; The Shop Stewards Act, 1974; The Codetermination at Work Act,
1976 which ended the undemanding dating from 1906 recognising the
employers' prerogative in respect of employment and the
distribution of work; the Job Security Act, 1974; the Work Environment
Act, 1978; and, finally, the most divisive measure, the Wage Earner
Funds Act, 1983.

Beyond these legislation driven changes, the highly centralised
collective bargaining system weakened in the 1980s. There was increasing
bidding up between the three central bargaining units-the blue-collar
private sector, the white-collar private sector, and the public sector.
For most bargaining rounds in the 1980s in the key private blue-collar
sector it was not possible to arrive at a generally applicable central
agreement. But if there were some substantial conflicts in the 1980s,
relations in industry were still good and the efficiency of Swedish
industry remained a shared goal for employers and unions alike and the
necessary structural change was carried out speedily, effectively and
humanely, as exemplified by the closure of shipyards. (Strath, 1987)

Australia has experienced significant changes in its traditional
industrial relations structures, policies and practices. Though there
has been no fundamental departure from formal compulsory conciliation
and arbitration processes which have been the centre-piece of industrial
relations since the beginning of the century, there have been some
important shifts in procedures and in the system infrastructure. The
significant changes arise from increased economic pressures, the origins
of which flow from set-backs in the value of Australia's primary
products in the export market, the uncompetitiveness of Australian
manufacturing industry, and the more difficult world economy. Equally
significant, however, have been shifts in political judgement about the
rationality and viability of the traditional application of a firmly
centralised approach to wages regulation and the newfound interest of
the national Industrial Relations Commission in a policy stance giving a
greater role for productivity and efficiency concerns, with growing
emphasis on negotiation techniques to achieve productivity bargaining.

After considerable difficulties in accommodating wage pressures,
the last Liberal-National Government brought about a wage freeze at the
end of 1982, a time when unemployment and inflation were each running at
around 10 per cent Before the freeze had run out the Hawke Labor
Government had come to power, with an agreement (the 'Accord')
with the trade unions, undertaking wage moderation on the basis of
government assurances covering a wide range of economic, industrial, and
social policies. The Accord was, in effect, immediately ratified by a
spectacularly successful national economic summit meeting between
Commonwealth and State ministers, employer association representatives
and individual employers, and trade union representatives in April 1983.

Consensus-based incomes policies have a very poor track record in
most countries. The Australian Accord has endured and given results, up
to a point. Real wages have fallen (though the 'social wage'
has risen); employment and profits have increased; inflation, though
still high, has decreased; and days lost in strikes have fallen, though
they are still high by international standards.

The durability of the Accord, and its continued constructive role,
have been made possible by the flexibility which government and unions
have shown in negotiations, and the fact that there is no attractive
alternative for them. Through government-union agreement, employer
acquiescence, and the aid of the Industrial Relations Commission, it has
been possible both to respond to changing needs and steadily to move
towards enhancing productive efficiency. Tax concessions,
superannuation, health care costs, and post-dating of wage increases,
have been elements in the successive agreements reached. As regards
efficiency, in 1987 growing strains in the Accord were eased by an
unprecedented two-tier award providing a general increase together with
a second adjustment dependent on productivity improvements to be gained
through 'restmcturing and efficiency negotiations" not at the
traditional centralised level, but through negotiations at an industry
or enterprise level. The 1988 and 1989 decisions of the Commission again
in effect provided a two-tier wage increase, laying stress on a new
structural efficiency principle, aimed at enhancing flexibility and
competitiveness. While the stocks of the Accord were remarkably high in
the early part of the decade, and while the broad direction of change is
still widely applauded, there is growing criticism of the pace of the
change and the barriers being erected in public policy to prevent a
stronger enterprise focus (Niland 1989, 1990).

Other countries experienced less structural change. In the United
States the only significant attempts to strengthen the New Deal Model
fell by the wayside. The Common Sites Picketing Bill was vetoed by
President Ford in 1976 and the Labor Law Reform Bill was lost in the
Senate in 1978. But there was substantial non-structural change. The
onset of recession brought concession bargaining and, to a lesser
extent, two-tier bargaining, (which, with its provision for differential
wage levels within a single workplace is different from Australian
two-tier bargaining where the effect is to produce variability between
workplaces). With the change in personnel in the National Labor
Relations Board under the Reagan Administration unions had less and less
success in gaining negotiating rights. And unionisation declined
steadily from 35 per cent in 1955 to 17 per cent in 1988.

In Japan, the inevitability, and to a large extent desirability, of
change is readily accepted. The planning of change, including securing a
consensus for it, is evident at all levels, from the shop floor quality
control circles, through the 'ringe' processes of management
to the evolution of national 'visions' by trade unions or
government sponsored committees, is part of the way of life. ' How
can we do it better' is a shared outlook in a productivity
orientated culture: there are few barriers to necessary industrial
change in Japan.

Japan being a country where relations between people are viewed as
more important than legislative interpretations, there have been few
significant legislative changes in the 1980s. But there has been one
structural change of note, namely the coming together of the four trade
union centres to form 'Rengo' in November, 1987 as a single
peak organisation for the trade unions of the private sector, and with
the intention of mcluding the public sector before the end of 1989. This
move, prompted by desire for greater unity vis-a-vis the government and
in the annual wage round, and facilitated by containing political
differences, does not, however, seem likely to bring about any
fundamental change in Japanese industrial relations.

The successful and stable industrial relations system created in
Germany after the war has not received any substantial alteration other
than the strengthening of the organs of codetermination, notably the
Works Councils Act 1972, the Codetermination Act 1976, and the relevant
minor amendments of 1988. Though the parties are not without their
differences, those differences have not hitherto proved insurmountable.
Collective bargaining, the German legislature, the Labour Courts, and
the arbitration provisions to deal with intra-enterprise disputes, have
worked effectively to ensure that the system takes changing needs in its
stride.

Lastly, looking briefly at the other industrialised market economy
countries, there have been no major reconstructions of industrial
relations systems. Canada, whose practices have much in common with
those of the United States, continues to have a decentralised and
conflictual industrial relations system. Notably few Canadian employers
have sought concession bargaining or two-tier bargaining (Thompson,
1989). Italian industrial relations remain conflictual and attempts at
reform have met with little success. The Spanish and Portuguese
industrial relations systems installed after the fascist era have proved
viable but have been somewhat unsuccessful in facilitating greater
flexibility and in avoiding conflict between collective bargaining
outcomes and the needs of economic policy. Spain, in particular, is
usually near the head of the strike 'league table'. One
possibility is that the pressures which forced other countries to reform
will catch up with Canada, Italy, Spain and Portugal in the 1990s. There
have been no sweeping changes in Denmark, Norway or Finland, and
periodic difficulties in respect of containing wages continue. There
have been no fundamental changes in Austria, Belgium or the Netherlands.
Ireland has been engaged in a review of labour laws but this has not
produced any fundamental changes and Swiss industrial relations have
continued on their peaceful way.

As to the international scene, no substantial changes in the
organisation of employers or unions during the 1980s, are evident, nor
has there been any significant development of internationally agreed
guidelines for multinational enterprises. There has, however, in most
recent years been some small movement in the direction of cross-national
consultation in a handful of multinational enterprises.

From one perspective it is surprising how well industrial relations
systems have withstood the tests of structural change and the need to
achieve labour market flexibility and hence improve competitiveness that
the 1980s have imposed on them. By meeting the challenge they have
forestalled the need for fundamental change, although the significance
of the adjustments to processes and strategies in some areas are
noteworthy, if mixed. A look over countries shows that if trade unions
have lost members overall and if in others they have lost heavily, in
some countries they have actually increased their membership. Some
unions have amalgamated but in general the configuration of unionism has
changed little as is the case with the configuration of employers'
associations.

In collective bargaining there has been a generally stronger role
played by management strategy and a greater emphasis on
decentralisation, with more matters being dealt with at the enterprise
or workplace level. But across the board there has been no sweeping
change in the way in which wages and working conditions are determined.
Most of the countries which experienced inflationary pressures from
collective bargaining in the 1970s have continued to experience such
pressures, albeit less severely in the 1980s. Industrial conflict as
measured by strike statistics has shown a substantial reduction fairly
generally but in no case has a country moved from being a relative
high-strike country in the 1970s to being a relative low-strike country
in the 1980s, or vice versa. Neither has the role of the state changed
substantially across the 1980s, except, perhaps in Britain and to a
degree in Australia.

So there has been no major change to speak of in industrial
relations structures and institutions in the 1980s, which could lead
some observers, mistakenly, to believe industrial relations is a bulwark
against those adjustments made vital by economic crisis. This would be
to ignore the massive shifts in the focus and style of collective
bargaining, with stronger emphasis on strategy and workplace exchanges.
To sum up, it would appear that there has been relatively little change
in industrial relations systems but there has been significant change
within industrial relations per se, largely due to shifts in processes
and the remodelling of relationships to support more flexibility,
decentralism and productivity enhancing measures.

3. The Agents of Change

The agents of change are the people or institutions whose
intervention can bring about substantial reform of an industrial
relations system. They include employers and their associations, trade
unions, governments /legislatives, the judiciary; and/or industrial
tribunals and individuals.

In recent years employers have certainly tended to take a more
vigorous approach to their workers and trade unions. Equally certainly
they and their associations have always sought some influence with
governments, promoting or countering proposed legislation. In their
relations with unions, employers have, in the nature of things, more
often sought to block or water down union demands for change than to
bring change about, though there are now quite a few instances of
employer-led innovation. For example, the Swedish employers were
primarily responsible for setting the levels at which bargaining has
been conducted in Sweden and to take a sectional case from the formative
days of industrial relations, after the great engineering dispute of
1897-98 the British engineering employers caused a whole industry-wide
framework of negotiation to be embodied in the terms of settlement. More
recently it is the employers who have been setting the agenda for
industrial relations in the United States. This has certainly affected
the operation of the industrial relations system, though it has not
changed the structure of the system itself. Australian employers in the
late 1980s, are showing signs of counter-clairning and even of
initiating the bargaining exchange after decades of reactive and
negative stance. But the conclusion must be that it is impossible to
find a case where employers, collectively, have initiated and
substantially led the reconstruction of an industrial relations system.

Far more change originates with trade unions, as is natural since
their objectives imply seeking change in the status quo. The Swedish
unions, for example, led the way to the active labour market policy and
insisted on the solidaristic wage policy in Sweden. They also set afoot
the Swedish industrial democracy legislation of the 1970s and the wage
earner funds of 1983. The German trade unions insistence on
codetermination introduced a significant change into German industrial
relations-and indeed the whole of that system owed much to the trade
unions in its formative stage, immediately following the war. The
British unions were largely responsible for the form of Labour's
short-lived legislation of the 1970s. The Australian unions, joint
originators of the 'Accord' of 1983, throughout the
1980's have been the key agents of change, although it might be
argued that their prime concern is to preserve or improve their position
in specific ways rather than seeking to reform the system as such Still,
the end result is a transformed system.

The best test of alleged 'change' is whether it affects
significantly the relations of management and workers and the terms of
employment at the workplace itself. Much legislation would fail this
test but legislation-mainly government sponsored legislation-is
nevertheless the principal agent to which employers, unions, and the
general public look for change. Legislation normally sets a framework
for the rights and obligations of unions and employers'
associations and management and employees and the relations between
them. It may set minimum conditions for employment, it may provide help
to resolve industrial disputes. And it is expected to safeguard the
public interest. Government as a change agent also has the opportunity
to set an example by the arrangements it makes concerning its own
substantial number of employees.

Government may be pro-active in legislating reform for ideological
reasons or because of an obvious, serious need. Otherwise it is only
likely to legislate when persuaded to do so by employers or unions or by
public pressure voiced through the media.

The fourth potential agent of change is the courts of law (and
quasi judicial bodies such as the industrial tribunals in Australia).
The experience of trade unions with the courts has not always been
happy. The legal profession, at least in the English speaking countries,
has been reared on the importance of protecting the interests of the
individual, and of trade; it is not always sympathetic to the collective
interests associated with organised labour.

In the United States the early history of industrial relations was
much influenced by court decisions. Several decades ago it was the
Supreme Court's judgement in the Lincoln Mills case (1957) and the
Steelworkers' Trilogy (I960) which effectively established the
quasi-autonomy of arbitration in grievance procedures in the United
States. More recently, when some agreements by filing under Section 11
of the Bankruptcy law, Congress moved rapidly to establish that this was
not permissible.

In Germany the Federal Labour Courtf'has become at least as
important as the legislator as far as regulations in the field of labour
are concerned" (Weiss, 1987:34). The rules concerning strikes, for
instance, have largely been evolved by the Court. Thus, in a case
concerning the formulation of a union claim in the metal industry in
Schleswig Holstein the taking of a strike ballot before the existing
agreement had expired was held to have violated the peace keeping
obligation and the union was fined heavily. Examples could be quoted
from other countries.

In Australia a judicial type body outside the normal courts of law
has had an important role in respect of industrial relations. The
Australian Constitution of 1901 [Section 51 (xxxv)] empowers the
Commonwealth to legislate with respect to "conciliation and
arbitration for the prevention and settlement of industrial disputes
extending beyond the limits of any one State". In accordance with
this power the Commonwealth established a tribunal-the Court of
Conciliation and Arbitration-charged with the compulsory arbitration of
labour disputes. The purely judicial functions which the Court had were
hived off in 1956, as a result of the High Court decision in the
Boilermakers' case, ruling that it was unconstitutional for a
Commonwealth tribunal to exercise both judicial and non-judicial
functions. This tribunal has now become, as a result of the Industrial
Relations Act, 1988, the Australian Industrial Relations Commission.

The role of the Commission since 1983 has, in practice, largely
been to endorse agreements reached by government and trade unions and
more or less reluctantly acquiesced in by employers; but the Commission
is by no means required to follow such agreements, and there have been
instances in the 1960's and 1970's when the federal
government, which is constitutionally precluded from legislating
directly in industrial relations, and the key industrial tribunal, in
whom such powers are vested, have been at loggerheads. The stance of the
latter body prevails in such instances.

As change agents, the courts generally have a limited role. Their
interpretations can, and often do, have an impact on the operation of
industrial relations, but they are not in a position to carry the burden
of any substantial revision of the system and its operation The
Australian Industrial Relations Commission is a special case. The
'principles' it has laid down since 1985 have had a marked
impact on workplace industrial relations, no doubt largely because they
went in a direction already clearly indicated by the government-union
agreements. But in a more potically open situation it is doubtful the
Commission could appreciably influence the industrial relations
scenario, as custinct from particular terms and conditions of
employment.

The fifth and final agent of change is the individual. Evidently,
at all times charismatic or powerful individuals put their mark on
industrial relations as on other human institutions, leading them in new
directions. In Britain in the late 1860s, when trade unions were under
attack as a result of the Sheffield outrages, a small group of union
leaders, (called the Junta by the Webbs), influenced the Royal
Commission on Trade Unions sitting at the time and turned public opinion
to the positive characteristics of unionism, thereby creating a climate
for the succession of laws favourable to the trade unions passed in the
1870s. Another example from Britain, Walter (later Lord) Qtrine, as
General Secretary of the TUC, did much to turn the trade union movement
into what came to be known, in the Second World War, as an 'estate
of the realm'. In Australia, it is difficult to imagine the
'new look' that the Accord of 1983 gave to industrial
relations without the personality of the prime minister, Bob Hawke.

Public opinion too, with some assistance from the media, and given
time, play a part in reform. Thus the British 'winter of
discontent' of 1978-9, played a part in the election of the
Conservative government in 1979, and creating a climate that assisted
the series of legislative changes on which that government embarked.

4. The Facilitation of Change

But if change is desirable and becomes feasible, how can it be
facilitated? What are the agencies that can give it legitimacy, smooth
out the obstacles, carry it forward, and iron out any problems that
arise in its implementation? (Niland: 1986:245)

Probably the greatest-and most desirable-facilitator is consensus.
When opinion leaders are supported by a kind of critical mass among the
population, change becomes relatively easy. But how can such a consensus
for change be achieved, given that most people are naturally suspicious
of change unless they are convinced of its value?

Again, the media are likely to be influential but they in turn are
likely to be influenced by opinion-forming individuals and bodies. The
process has a certain circularity. Politicians, pressure groups,
academic authorities, international organisations, consultative bodies,
and specially-appointed investigative bodies, all play a part in this
process. The roles of most of these is obvious enough but the part
played by the last two deserves some comment.

Modern industrial societies contain a mass of standing bodies
designed first, to advise government or to oversee the operation of
public agencies; second, simply to act as forums to exchange views and
experience; or third to ensure that different points of view are
debated. Pertinent to industrial relations, the Social and Economic
Councils of France, Italy and the Netherlands - and on an international
level that of the European Economic Community-are prominent examples of
the sliding consultative body. The typical council has the right, and
indeed obligation, to express its views to government and the public on
proposed social and economic legislation. But it can also debate
questions of its own choosing. It is usually tripartite or multipartite
in membership. The Commissions associated with the French planning
apparatus, which deal with matters such as safety at work are another
example. The National Labour Consultative Council in Australia is
another variant on this group. The British Advisory, Conciliation and
Arbitration Service, ACAS, fits the second category: it has a Council
(comprising employers, unions, and a small number of independents),
which watches over the work of the Service and can express views on
relevant issues. The Japan Productivity Council can serve as an example
of the third category. Finally, there are bodies which, at least
informally, may go beyond consultation, and provide the basis for
agreements or understandings between governments, unions and employers,
like the Norwegian Contact Committee or-except that government sits as
an employer rather than as government-the Irish Employer-Labour
Conference (Addison, 1979, Cooper 1982).

The role of the inquiry is to present a weighing up of the
different aspects of a complicated subject with much fuller
consideration than can be given by, say, a cabinet committee. Most
inquiries are appointed to expose the arguments and possible courses of
action and then to ascertain the views of the public on them so that
mature decisions can be taken-though it has been said that some
inquiries are used to relieve government of having to take a decision on
a thorny subject by deferring it for what might prove to be three years
or more! As the government in effect appoints those who make up the
inquiry, and decides its terms of reference, it is possible for a
government to set up an inquiry that will probably support an option
that the government already favours. This, however, is not invariably
the case and when used it may backfire. As an example, the Bullock
Committee of Inquiry on Industrial Democracy set up in Britain in 1975,
for which the terms of reference prejudged the desirability of worker
representatives on boards of directors, and the membership of which
could be counted on to split, with the majority making radical
proposals, produced a report which met such a frigid reception that the
subsequent White Paper was a very much weaker affair. (In

the event, the dissolution of Parliament meant that the matter was
not progressed.) The Bullock Committee, it should be noted, considered
the private sector, while parallel inquiry in respect of the public
service was entrusted to an interministeral committee-yet another option
open to governments.

The Royal Commission or Committee of Inquiry is a common instrument
in Britain, Australia and Canada. The Hancock Committee (1983-85) in
Australia and the Woods Task Force reporting in Canada in 1968 are
examples drawn from industrial relations of this kind of inquiry. In the
United States the equivalent tends to be the Hearings conducted by
committees of the Senate or the House-the Senate hearings on worker
alienation at the beginning of the 1970s is an example. The French, as
well as using parliamentary committees, the Social and Economic Council,
and bodies like the Sudream Committee which reported in 1975, also use
enquiries by one or two experts: examples are the Adam Report of 1972 on
collective bargaining; the Auroux Report of 1981, covering many aspects
of industrial relations; the Tadder Report of 1986 concerning working
time; and the Aubry Report of 1988 on the significance for France of the
social aspects of the Single Europe programme of the European Economic
Community. In Germany the Biedenkopf Committee reported in 1970, with an
assessment of co-determination.

The Green Paper and the White Paper, in which government puts
forward more or less tentative ideas are another way of eliciting the
reactions of the public without committing government to a particular
course of action

In short, there is a wide variety of instruments available to
governments to secure considered views and to test public opinion.
Further, all of the instruments mentioned help to create a climate of
informed opinion which, if the matter at issue has been well judged,
serve to give legitimacy to the course chosen. It is then up to
government and the parties to consider what problems are likely to arise
in implementation and to find ways to resolve (or to avoid resolving)
them. Important among these is likely to be winning the support of
representative groups and giving publicity to examples of successful
adoption of the option chosen.

5. The Barriers to Change

We lack a measure of improvement in industrial relations.
Furthermore, many aspects share with marriage the feature that good and
fruitful relationships cannot be enforced from the outside. But this is
not to say that nothing can be done outside the employing enterprise to
help. Clearly, external agencies should provide positive support and
minimal constraints.

The most serious barrier to improvement, however, is probably not
constraints or lack of assistance. Rather, there is the barrier of
simple inertia, the seeking of refuge, if change is mentioned, in the
principle of unripeness of time. That inertia can probably be overcome
only by the force of competition acting on the lethargic union, firm or
consultative committee and a process of education, in which government
and interest groups, not to mention the means discussed in the last
section, have a part to play.

So far as workers themselves are concerned, there is no evidence to
suggest that more than a small minority resist change once they see the
reason for it and find that reason credible. But coming to this point is
not necessarily an easy experience.

If good industrial relations cannot be imposed, at least
unnecessary barriers can be removed. Such barriers may derive from a
country's Constitution, from the body of law, from collective
agreements, or from the rule of employers' associations or trade
unions.

For most countries the Constitution-if they have a written
Constitution - has little to say about industrial relations but,
equally, tittle that presents a questionable constraint. Australia is
perhaps the one country where the Constitution, by accident of its
birth, constrains the Commonwealth government by effectively limiting
its powers to the provision of "conciliation and arbitration for
the prevention and settlement of industrial disputes extencting beyond
the limits of any one State", which has been interpreted by the
High Court and by most federal and state governments as discouraging
alternative forms of industrial relations.

The body of law in respect of industrial relations varies
appreciably between countries. Germany, notably, has an extensive legal
framework setting out the rights and obligations of the parties and
making provision for the resolution of their differences. But it cannot
be said that the existence of so much law is felt as burdensome by
management and workers at the enterprise. And the legislature, as
evidenced by the legislation passed in 1988, is at pains to update the
law when the need arises.

At the other extreme, in Japan, where the emphasis is on acMeving
harmonious relations on a personal basis there is much less need to seek
to ensure that the law covers all eventualities and though there is an
adequate body of law there is relatively little recourse to it for
industrial relations purposes.

In the United States, there has been little change over the last
thirty years in the framework laid out in the National Labor Relations
Act, 1935, the Labor Management Relations Act 1947, and the
Labor-Management Reporting and Disclosure Act, 1959. There is criticism
that this legislation is failing in its original objective of promoting
collective bargaining. It fails

to facilitate worker representation while being viewed by advocates
of a 'union-fee society' as burdensome. But this is not a
question of too much or too little law but of the adequacy of existing
law. Incidentally, the comparable legislation in Canada does work to
promote collective bargaining.

The British case has already been discussed. There the question is
how to find a legal framework that meets the very different political
views in the British parliament. Meanwhile, labour and the trade unions
see the body of legislation created over the 1980s as extremely
burdensome while the Conservatives and employers felt much the same
about Labour's legislation of the 1970s.

But it is impossible to analyse here the detail of all the possible
barriers that the law-and equally collective agreements and the rules of
organisations - impose on good industrial relations in industrialised
countries. The present purpose is merely to draw attention to an area
that certainly warrants research. In general, if the need for change is
sufficiently great and clear, barriers will be swept away. But an
industrial relations system can decline without the need for change
being readily apparent. People tend to be comfortable with a system to
which they are accustomed. But a society that shuns change will be very
much at a disadvantage in a competitive world. The prizes will go to
societies that overcome the barriers to such change as may be desirable
to ensure effective industrial relations.

The challenge is to achieve change without being made to do so by
war or economic crisis. For that, long-term vision, boldness, and a
change mentality are needed.

6. Conclusion

Several propositions emerge from this comparative analysis:

* A good many industrial relations systems are clearly sub-optimal
in terms of the tests suggested in the introduction to this article.
But, as with economic systems or social systems, optimality is both a
subjective prescription and a goal, rather than an attainable state. It
is something toward which a society strives, perhaps seldom culturally
arriving at the perfect position. Yet through this endeavour industrial
relations is made better, perhaps much better, than if the striving is
absent The push for change is crucial.

* Industrial relations are by no means the only variable in
creating an economically sound and equitable society, but they are one
important element, and one that can be improved.

* The national responses to the problems common to industrialised
market economies have been heavily mediated through the dynamics of the
national systems. Systems will continue to differ, particularly in how
they strive for change.

* Although countries have tended to respond at much the same time
to common problems, and although in some important dimensions (such as
the increased attention to strategy by management and shifts toward an
enterprise focus) several national systems display greater
comparability, there is no evidence to support the specific hypothesis
of convergence and nothing to suggest that convergence of systems would
be of value.

* The elements bearing on change are quite extensive. They include:
the actors in the industrial relations system (government, employers,
unions, tribunals); the avenues which can open the way to change
(politicians and political processes, the law, collective bargaining,
managerial initiatives); the impediments to change (lethargy, suspicion
of the unknown, existing laws, agreements and practices) and the extent
to which the perceived need for change is trauma drive (recession,
bankruptcy etc) as opposed to rationally driven (productivity,
efficiency).

That said, what steps to improve present industrial relations are
suggested by the experiences of countries surveyed here?

First, it must be said that industrial relations start with
managers and workers at the workplace. It is often overlooked that the
wider industrial relations system tends only to be invoked when managers
and workers disagree-which in most enterprises is not much of the time.
The elements making for good workplace relations are reasonably well
known, if far from universally practised. They can be summarised as:

* managers and supervisors treating workers with respect, and
taking their views into account;

* a reasonably clear-cut managerial structure with line management
taking its full share of responsibility for the human resources of the
enterprise;

* effective forms of consultation and grievance procedure, together
with equitable disciplinary arrangements;

* straightforward and fair wage structures and methods of payment;

* well designed tasks with appropriate training and skills
development; and

* an ability by both sides to process change.

In recent years the role of management in industrial relations is
much discussed; the attitudes that workers bring to work much less so.
It is in the nature of things that in most respects workers will react
to what they find at thw rokpalce; poor morale commonly indicates bad
management. But the differences between the usual attitudes of British,
French, German, Japanese, Swedish and American workers toward their
employer and their work, as attested to by many attitude surveys (see
Barbash, 1984) suggest that workers' attitudes, whatever their
cause or origin, do count substantially towards good or bad workplace
relations.

The links between what happens in the enterprise and the external
industrial relations system must also be taken into account. They too,
vary between countries. Germany has customarily established detailed
laws to govern what takes place within the enterprise and what takes
place outside. Japan has preferred to regulate as little as possible.
Australia has given the key role in determining the basis of relations
within the enterprise to the centralised industrial tribunals, but as
part of the agenda for change there has been a lowering of the centre of
gravity to foster more enterprise-focused negotiations. The United
States has laid down a framework within which collective bargaining
takes place, and grievances are resolved between the employer and the
union, acting with the mandate of a public agency. As already noted,
after the war most European countries constructed systems which provided
for conflictual matters to be discussed outside the enterprise, and
consensual matters within the enterprise.

In the governance of the workplace many different combinations of
legislation, collective agreements made at various levels, and rules
made wilhin the enterprise are possible, and examination of the evidence
does not justify a conclusion that one combination is, of itself, better
than another. One can, however, readily identify versions which are not
conducive to good relations, such as the fragmentation of bargaining
(now, fortunately, somewhat less marked) which grew up in Britain; the
multiple, yet inadequate, workplace representation arrangements in
France; and, again, the consequences in Australia of giving
responsibility for the regulation of the workplace to an outside
quasi-judicial body.

Turning to industrial relations beyond the enterprise, again there
is a considerable variety in the ways in which law and employer-union
arrangements combine to make up the framework, as there is in the laws
and arrangements themselves. And one finds some similar legal
foundations and employer/union practices in "good" and
"poor" industrial relations systems alike. It seems
impossible, examining the industrialised market economies, to deduce
that any particular legal measure of institutional arrangement is the
cause of strength or weakness of an industrial relations system. Indeed,
the attitudes-of workers, management, government and the general
public-brought to the system seem likely to be more important than the
framework itself. But that does not mean that the framework is
irrelevant.

It is most certainly important that there should be business-like
and equitable laws concerning the rights and responsibilities of trade
unions and employer associations; at least a minimal framework for
collective bargaining; such law concerning industrial conflict as befits
the nature of industrial relations in the particular country; and an
equitable law of employment As to the institutional arrangements, on
balance there is merit in an industrial (or enterprise) union structure
and a single central organisation, even if tidiness is of little
importance in itself. Collective bargaining levels are likely to depend
on national circumstances, but there is evidence that both centralised
(Denmark, Norway) and decentralised (United States, Japan) systems can
work at least reasonably well. The trend in the 1980s, however, has been
to less centralised arrangements. The law of industrial conflict is
often vague, particularly the constitutional provisions found in some
countries. Such vagueness should obviously be reduced. Most public
agencies for mediating conflict have a good track record, as have the
forms of bipartite mediation such as those in Germany.

There is now quite long experience of the different systems of
worker participation, or industrial democracy involving worker
representations on boards of directors, introduced in Germany beginning
in 1951 and 1952 and in several other north-west European countries in
the 1970s. That experience, though it has disappointed many who hoped
for more from it, has been generally positive (significantly, such
arrangements are found in countries where industrial relations have been
more consensual than conflictual). There is no substantial body of
opinion against the system in those countries where it has been adopted.
But participation can take other forms. Collective bargaining is one,
and may be said to be the basic participative form in the United States.
Another, notably in western continental Europe, is the statutory or
nationally agreed works council or works committee, possessing rights to
information, consultation, co-determination, and sometimes unilateral
decision-making-but also responsibilities. Such bodies, while not
demonstrating spectacularly positive effects on industrial relations,
have generally been at least modestly successful. But could they be
exported to countries that do not have them? They certainly represent an
option but they could not easily be adopted in countries where the
adversary principle rules, except in specially tailored cases, such as
those found in the United States (Cutchter-Gershenfeld, 1986). Lastly,
share distribution and profit-sharing schemes have often shown fairly
good results-if, perhaps, less than their more fervent advocates
proclaim. But neither participative styles nor schemes based on
enterprise performance can be satisfactorily imposed from above. In the
latter, national input is usually limited to tax relief, leaving the
arrangements to management and workers. Nationally operated schemes,
such as the Swedish wage earner funds and compulsory profitsharing in
France, have been disappointing.

Readers seeking an agenda for industrial relations change may be
disappointed to find no neat how-to-do-it list of prescriptions. But
given the substantial differences between countries, we should not
expect industrial relations in any one country to easily accommodate
prescriptions from others. The results of this study show that
industrial relations systems, or at least the way they work, can change
and do change. And by understanding those changes-their rationale, form
and impact-we build a rich source of ideas about how any one country may
consider and handle its own agenda for change.

Weiss, Manfred (1987) Labour Law and Industrial Relations in the
Federal Republic of Germany, Kluwer, Deventer

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